SECURITIES AND EXCHANGE COMMISSION SUES FORMER CHIEF EXECUTIVE OFFICER OF EVERGREEN MEDIA CORPORATION AND TWO FAMILY MEMBERS FOR INSIDER TRADING

The Securities and Exchange Commission today filed an insider trading case against Scott K. Ginsburg, the former CEO of Evergreen Media Corporation, and two family members who received stock tips from him and made total trading profits of $1.8 million. The action was filed in the United States District Court for the Southern District of Florida.

Tipping Concerning the Acquisition of EZ Communications

The Commission alleges in its complaint that, in a July 1996 meeting with the CEO of EZ Communications, Inc., Scott Ginsburg, as CEO of Evergreen Media, received material, nonpublic information that EZ Communications, Inc. was for sale. The Commission alleges that, in breach of duties that he owed to Evergreen and to EZ, Scott Ginsburg misappropriated the information by tipping his brother Mark Ginsburg who then purchased EZ stock and tipped his father, Jordan Ginsburg, who also purchased EZ stock. The Commission further alleges that Scott Ginsburg learned additional information about the planned sale of EZ and submitted a bid for EZ on behalf of Evergreen. According to the complaint, Scott Ginsburg updated Mark Ginsburg on the additional information, and Mark Ginsburg and Jordan Ginsburg purchased additional shares of EZ. During July 1996, the Commission alleges that both Mark and Jordan Ginsburg purchased a total of 73,800 shares of EZ in their accounts, or accounts over which they had trading authority. On August 5, 1996, American Radio Systems, Inc. announced that it was acquiring EZ for $655 million. The price of EZ shares closed that day at $42 1/8, an increase of 30%, over the prior trading day's closing price. The Commission alleges that Mark and Jordan Ginsburg had profits of $664,000 and $412,875, respectively, from their trading in EZ stock.

Tipping Concerning the Acquisition of Katz Media

The Commission additionally alleges that in, June 1997, Scott Ginsburg again tipped Mark Ginsburg, this time with material, nonpublic information about the planned sale of Katz Media, Inc. According to the complaint, by mid-June 1997, Scott Ginsburg learned material, nonpublic information that Katz Media was for sale and that a senior Katz Media executive was encouraging an offer from the entity to be formed from the pending merger of Evergreen and Chancellor Broadcasting Corporation. The Commission alleges that, in breach of a duty that he owed to Evergreen, Scott Ginsburg misappropriated this information by tipping Mark Ginsburg, who purchased 150,000 shares of Katz Media stock the day after he received the tip. According to the complaint, at the time of the tip, substantial steps toward a tender offer had been taken, and it was reasonably foreseeable to Scott Ginsburg that Mark Ginsburg would trade. On July 14, 1997, Evergreen and Chancellor jointly announced a tender offer for all of the shares of Katz Media for $373 million, or $11 per share. According to the complaint, Mark Ginsburg had profits of $729,000 on his trading in Katz Media stock.

In its complaint, the Commission alleges that Scott Ginsburg, Mark Ginsburg and Jordan Ginsburg violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and that Scott Ginsburg and Mark Ginsburg violated Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-3 thereunder. The Commission seeks a permanent injunction against each defendant against future violations, disgorgement of the $1.8 million in profits plus prejudgment interest thereon and civil penalties.

The Commission gratefully acknowledges the assistance provided by The American Stock Exchange in the investigation of this matter.